In a major boost to India’s growing startup ecosystem, the Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the establishment of the Startup India Fund of Funds 2.0 (Startup India FoF 2.0) with a total corpus of Rs. 10,000 crore to mobilize venture capital for the country’s startups. India’s Minister of Information and Broadcasting and Railways, Ashwini Vaishnaw, provided details about the cabinet decisions.
The scheme is designed to accelerate the next phase of India’s startup journey by mobilizing long-term domestic capital, strengthening the venture capital ecosystem, and supporting innovation-led entrepreneurship nationwide.
Launched under the Startup India initiative, Startup India FoF 2.0 builds on nearly a decade of sustained efforts to position India as one of the world’s leading startup nations. Since the launch of Startup India in 2016, the ecosystem has grown from fewer than 500 startups to over 2 lakh Department for Promotion of Industry and Internal Trade (DPIIT)-recognized startups, with 2025 marking the highest-ever annual startup registrations.
Building on Fund of Funds for Startups 1.0
The Startup India FoF 2.0 follows the strong performance of the Fund of Funds for Startups (FFS 1.0), launched in 2016 to address funding gaps and catalyze the domestic venture capital market.
Under FFS 1.0, the entire corpus of Rs. 10,000 crore was committed to 145 Alternative Investment Funds (AIFs). These AIFs have invested over Rs. 25,500 crore in more than 1,370 startups across sectors including agriculture, artificial intelligence, robotics, automotive, clean tech, consumer goods and services, e-commerce, education, fintech, food and beverages, healthcare, manufacturing, space tech, and biotechnology.
FFS 1.0 played a pivotal role in nurturing first-time founders, crowding in private capital, and establishing a strong foundation for India’s venture capital ecosystem.
Key Features of Startup India FoF 2.0
The new fund aims to take Indian innovation to the next level, with a targeted and segmented approach:
Deep tech and innovative manufacturing: Prioritizing breakthroughs in high-tech areas requiring long-term capital.
Empowering early-growth stage founders: Providing a safety net for new and innovative ideas to reduce early-stage failures.
National reach: Encouraging investment beyond major metros to foster innovation across the country.
Addressing high-risk capital gaps: Directing capital to priority areas important for self-reliance and economic growth.
Strengthening domestic venture capital: Supporting smaller funds to further boost the domestic investment landscape.
Startup India FoF 2.0 is expected to shape India’s economic trajectory, strengthen manufacturing capabilities, generate high-quality jobs, and position India as a global innovation hub.
Aligned with the national vision of Viksit Bharat @ 2047, the fund reflects the government’s continued commitment to empowering entrepreneurs, fostering innovation, and unlocking the full potential of India’s startup ecosystem.
